Not Quite Yet Gone With the Wind

DALLAS—It’s a weird time for the oil and gas business. 

It’s always kind of weird, of course—it’s a weird business, the unlikely offspring of swaggering Texas miscreants in big hats and nerds with doctorates in geophysics, gamblers and engineers, wildcatters and roboticists—but right now, if you talk to a Texas landman or a Washington oil lobbyist, you can’t help but see that the industry is being pushed and pulled in at least two ways at once: With Trump in the White House and a high tide for the kind of atavistic populism that loves cheap gasoline almost as much as it hates foreigners and college professors, oil and gas should be riding high, but that isn’t the case. Not exactly, anyway.

Oh, they’re doing fine—don’t worry about the poor oil barons, they’re going to be okay!—but there is a sense that they are simply playing out a very good hand, playing it skillfully and lucratively, while having it in the backs of their minds (and, increasingly, in the front of them) that there’s no reason to believe that the next hand they’re dealt is going to be nearly as good. Culturally, those occupying the commanding heights of the business world are moving on—oil and gas may be profitable, but it isn’t fashionable—and it’s harder than you might think to get money to drill new wells, even as Chinese and Russian cash has poured into the acquisition of mineral rights and other investments in the U.S. energy industry. 

The Biden administration hated the oil and gas guys, and the oil and gas guys hated the Biden administration right back. Joe Biden was honoring his predecessor: Barack Obama was at times very frank about his desire to put the oil and gas business out of business and “end the age of oil in our time.” Donald Trump sees the world a little differently.

But the new administration has its issues, too, though the big players in the business are loath to criticize it in public. Producers roll their eyes at yee-haw “Drill, baby, drill!” sloganeering and note that Donald Trump’s oft-repeated desire to “unleash” American petroleum production with radically expanded output would in all likelihood bankrupt every major oil company in the country by cratering prices. The oil and gas business is a depletion business, after all, and a big part of its business model is what you might politely call price management (they call it “market dynamics”), which is different from price-fixing in that it doesn’t involve outright illegal collusion.

Culturally, oil and gas is kind of having a moment as hundreds of thousands of Americans move to Texas every year or dream of moving to Texas and, in the meantime, watch Billy Bob Thorton chew the scenery in a delightful fashion as put-upon, seen-it-all oil-and-gas operative Tommy Norris. Landman is the latest runaway success from Yellowstone creator Taylor Sheridan, who has figured out how to apply Roger Ailes’ secret cable-news formula to television drama and serve a highly lucrative niche market: half the country. “We don’t write Landman,” an oil lobbyist told me, “but it sometimes seems like we do.” If you have enviro-skeptical friends and an Internet connection, you’ve probably seen that much-remarked-upon scene in which the fictitious landman explains how wind turbines depend on oil, while oil drillers use wind to provide power in off-the-grid locations. “They use clean energy to power oil wells?” asks an incredulous young idealist. “They use alternative energy,” the landman says, correcting her. “There’s nothing clean about any of this.” It’s like The West Wing for the right wing.

Texas continues to set records for oil and gas production—and for royalties and taxes paid—but those bright young men and women flocking to Austin and Dallas mostly aren’t coming for oil and gas jobs, and industry insiders report that banks and private-equity investors are less eager to fund new exploration than they were even a few years ago.

In fact, the oil and gas business isn’t always even sure what business it is in. Many producers have seen their side projects—real estate, infrastructure, construction, even internet services—grow into large and profitable operations in their own rights, while the promise of extracting valuable minerals such as lithium from fracking wastewater offers oil companies a way to get into the electric vehicle (EV) business more directly. (Of course, they’re already in the EV business: More than 40 percent of U.S. electricity comes from natural gas, and two-thirds of it comes from some kind of fossil fuel—whether you’re driving a big diesel in West Texas or an all-electric urban zipabout in San Francisco, you’re driving a car powered mainly by hydrocarbons.) 

“There’s a lot of people who want us to say we’re in the ‘energy’ business, and there’s something to that,” said T.J. Edwards, a real-life Texas landman who, unlike his fictional counterpart, has never been kidnapped by a Mexican cartel but has seen the occasional shotgun brandished in his direction by an unwelcoming landowner and has had at least one voodoo curse pronounced on his associates. And this is a guy who says wind power—wind!—is “like the Wild West.” 

So, energy?

“There’s a lot of us who still think we’re in the oil and gas business.”

Edwards is a wry and thoughtful man who is far from the stereotypical Texas oilman, but he got into being a landman in the most Texas way possible: at a football game. 

“I had no connection with oil and gas,” he said. “My grandfather worked for Sun Oil, but my dad’s a pilot. I guess it skipped a generation. In the early 2000s, most of the landmen in the business were pretty oil. So when the Barnett Shale exploded out in Fort Worth, there just weren’t a lot of land people. It was an interesting time. And so I met a guy at a football game, and he suggested I look into doing it. I was a history major, which turned out to be more relevant than you might think.”

That’s because a landman does a few different things that don’t obviously go into the same basket. One is negotiating and recording contracts—“practicing law without a license,” as Edwards put it—and another is acting as an untrained therapist working through internecine conflict when warring families cannot agree about selling their minerals. There are geologists to figure out where the oil and gas is likely to be, and there are engineers who excel at getting it out of the ground, and, between those two groups, you have the landmen, who figure out how to get that done legally. And that requires a very specific kind of historical research: running down titles and mineral rights that in many cases were first assigned more than a century ago.

Record-keeping in the first half of the 20^th century was not great, especially before the creation of Social Security and the assignment of Social Security numbers, and it was worse in remote and sparsely populated places such as West Texas than it was in more densely settled areas. At the same time, many of the oil-rich stretches of East Texas are located in areas that have long been heavily African-American, with many small farms that had been worked and owned by people who did not have ready access to lawyers and courts. That means that there have been some generations in which the formalities—probate, affidavits of heirship—have been skipped, and legal rights get murky.

“There’s a lot of history and genealogy,” Edwards said. “People were reserving minerals back in the 1920s. When I started, there was not much online at the time, so you’d go to these dark, dusty courthouses, open up dusty tomes, run the title backward until you found a mineral reservation, and then run that forward. In the ‘20s, it’s hard to find proof of death because no one had Social Security numbers. So I’d end up at the genealogy library in Weatherford, Texas, to figure out where the old cemetery is and then go and take a picture of the tombstone. It seems kind of ridiculous, now, that a company like Chesapeake [its successor firm, Expand Energy, is an S&P 400 component with nearly $9 billion in revenue in 2023] was willing to pay a bunch of college guys to take rubbings of tombstones. But we’d figure out who owns it, and they gave us authority to go lease them.” 

“I spent a lot of time with old widows on their farm at the kitchen table learning about their families and their china patterns,” he continued. “I loved it. It was good learning. … And me and a bunch of guys who kind of look like me and all had college degrees started the Barnett Shale.”

There’s plenty of drama—but it’s less like Landman and more like All in the Family. 

“It’s really funny,” Edwards said. “We were at this boutique hotel in downtown Dallas a couple of weeks ago, and there was this British guy who works for the family that owns the hotel. He asked me what I did and when I told him, the first thing was: ‘Like Billy Bob!’” He pauses. “Yep. Exactly like Billy Bob.” 

I don’t suppose I have to clarify that he was being sardonic. 

“People do get into situations like that,” Edwards said. “The closest I’ve got to a cartel is dealing with meth addicts cooking meth on great-grandma’s homestead. That’s happened several times. You’ll have these beautiful ranches, and the matriarch who kept it all together has passed on or is living in a retirement home down in Houston, and there’s no one to carry on farming—but they’ve got grandkids who are absolute shitheads out there cooking. It’s meth, so everybody’s paranoid, and it’s hard to get anybody to answer the phone.”

But, in Texas and in many other states, the mineral rights are superior to surface rights. If somebody owns the mineral rights underneath your land and decides he wants to roll onto your property, build a road through it, and start drilling, there may not be a hell of a lot you can do about it. “It’s hard to keep anybody off your property if you don’t have the mineral rights,” Edwards noted. “This one ol’ boy”—Edwards is a Southern Methodist University graduate with a kind of preppy affect, but he has a lot of stories that begin with “this one ol’ boy”—“we’d spent months trying to get in touch with. He didn’t answer his phone, didn’t understand what was going on. This was going to be a drill site. It was in the company’s best interest to work with the surface owner. He could have said, ‘Hey, this is where I want you to put the road, use this kind of caliche, this kind of fence.’ But he just never responded. So the company had a rig ready and they got on his property and went right down the middle of it. It was kind of his retirement place. It was super sad, but he threatened to come to Dallas and kill everybody, and the secretary started keeping a pistol on her desk. We offered to buy the property from him, but, of course, it’s not worth anything now that we’ve destroyed it.” 

“I hate that kind of stuff,” he added.

There are other “intangibles,” as Edwards called them—problems that people who don’t know the oil business and the communities in which it operates don’t foresee or understand. Some of the rural areas, for example, are served by electrical co-ops rather than by traditional utilities, meaning that the people in charge, however bright or well-meaning, are amateurs and volunteers. Sometimes, a project gets under way only for the drillers—and the investors—to discover that there isn’t enough electricity to go around, and that, given a choice between powering the wells and powering the local community center, the drillers don’t win. And there is also the pervasive sense that the oil and gas business is at best a kind of necessary evil—one that many banks and big institutional investors would prefer not to be involved with. 

“It’s harder to get money,” Edwards said. “For a lot of banks, the optics are not good. Banks that have traditionally been good lenders to oil and gas are getting out, and no one wants to be in it, even though prices are amazing.” Big institutional investors—from churches to philanthropic trusts—have dumped their oil-and-gas investments, sometimes on poor terms just to be rid of them. “Oil is just a bad, dirty word for them.”

The American Petroleum Institute (API), the big trade association for the oil and gas business, walks a fine political line—and they are very good at it.

If you are a major multinational oil company, you end up—like it or not—doing business with some of the worst people in the world. The oil and gas are where they are, and there isn’t anything about well-governed liberal democracies that helps to put oil in the ground. Sometimes you get to deal with Norway or the Brits. Sometimes, you deal with … less nice people. (Let me emphasize that this is me talking and not the API or anybody else in the business, but: If you’ve spent several decades dealing professionally with petty tyrants, corrupt despots, mercurial autocrats, and unpredictable personalist regimes around the world, then dealing with Donald Trump and his gang is, by comparison, a pretty vanilla exercise. Trump would like to be a gangster, but he’s closer to being a gangster rapper—a persona affected for personal profit.)

The API has a lot of very specific and technical stuff on its political to-do list: regulatory reform, extending the 2017 tax credits, bonus depreciation, the methane fee, extending the carbon-sequestration credits from the grievously misnamed Inflation Reduction Act, etc. Getting that all done while managing the delicate ego of Donald Trump is one of those things that is less science and more art. 

So, they put out press releases praising this or that appointment and gently criticizing the administration over little things like putting an enormously stupid new tax on the stuff we use to make gasoline and such, e.g., this from CEO Mike Sommers: 

Energy markets are highly integrated, and free and fair trade across our borders is critical for delivering affordable, reliable energy to U.S. consumers. We will continue to work with the Trump administration on full exclusions that protect energy affordability for consumers, expand the nation’s energy advantage and support American jobs. 

The U.S. is by far the world’s largest oil producer, but U.S. refineries—primarily in the Midwest—rely on Canadian crude to produce the gasoline, diesel and jet fuel that’s critical for transportation, agriculture and American consumers. The U.S. is the largest market for Canadian crude oil exports and Mexico is the No. 1 destination for U.S. refined product exports. U.S. oil and natural gas exports to China totaled more than $14.4 billion in 2023 and are critical to reducing our trade deficit.

Again, I don’t want to put words in anybody’s mouth, but I suspect that the initial draft included a comma followed by “you idiots” in there somewhere.

API’s view is that the overall energy industry is operating under a lot of unnecessary and artificial supply constraints while demand is still pointed upward like a rocket. They don’t want to flood the market with cheap product tomorrow and drive prices down, but they want to be able to invest in and develop new technologies and resources to meet demand in future decades—and prevent prices from going up so much that rival industries become more competitive. 

One of the little ironies of 21^st-century economic life is that while 30 years ago all the smart people were talking about the dematerialization of the economy, with the manipulation of digital bits superseding the manipulation of physical atoms, that bit economy is now getting very, very hungry for physical resources: Those big new data centers and AI galaxies need a lot of power, and it isn’t going to come from happy thoughts and unicorns. It’s going to come from petroleum in the United States, whereas in China and India a lot of it is still going to come from coal. One of the things that keeps getting lost in the discussion—one of the things that many environmentalists do not want to admit—is that, from an environmental point of view, the best-case scenario is building a lot of new nuclear-power plants, while the second-best (and more plausible) scenario is the continued displacement of coal by natural gas and the improvement of carbon-capture and related technologies.

I like talking to Amanda Eversole, who is API’s chief advocacy officer and an executive vice president. She is one of the least BS-y people I run into when talking to similar people at similar interest groups. If she’s not going to talk about something, she’ll just say so and not waste your time not talking about it while pretending to talk about it. She’s also not ashamed of her industry and what it does, which isn’t universally the case with oil and gas people. (When we were talking about Canadian crude and diesel production, I mentioned that I drive an F250 diesel, and she said, “Thank you very much.”) She sticks pretty closely to API’s “5 Point Policy Roadmap,” which is one of those advocacy statements that puts forward arguments in a way that is painstakingly anodyne while also touching on things that are obviously—and undeniably—true.

The Big 5 are, in API’s words: protecting consumer choice, bolstering geopolitical strength, leveraging our natural resources, reforming our permitting system, and advancing sensible tax policy. Yeah, a lot of that is lobbyist-talk—does anybody say he is in favor of insensible, outrageous tax policy?—but it’s also more or less what the general public needs to understand about the American energy business (or oil and gas business, or whatever you want to call it) vis-à-vis the public affairs of Washington.

Our country is richly blessed with oil and gas, demand for it isn’t going away, how we go about regulating that industry and guiding the course of its development is of enormous geopolitical importance, and, as such, how we regulate and tax those producers matters in ways that go well beyond the usual regulation-and-taxation issues of externalities and revenue. While it is important to think differently about the private and public sectors, the fact that the United States has the world’s most productive oil and gas industry is a lot like the fact that the United States has the world’s most powerful military in that it gives it something that countries without such resources don’t have: options. Belgium and Switzerland are lovely countries with much to recommend them, but when it comes to acting upon history rather than being acted upon by history, you’d rather be the country with all the oil wells and the tanks.

And the calculations can be very specific. For example, many people in the industry don’t think, from a global point of view, that much new refining capacity is needed—if any—but it matters a lot where those refineries are. For years, Iran, a major petroleum producer, suffered from an almost total reliance on imported gasoline, which made its economy vulnerable to sanctions, sabotage, and other forms of intervention. The United States imports Canadian crude in part because it’s easier to make diesel and some other fuels out of the heavy Canadian stuff than from the “light, sweet” stuff from West Texas. If you’re in the Midwest and you need diesel (and who doesn’t?), it matters whether your regional refineries have access to that Canadian crude and whether there is a big stupid tariff on it.

You don’t have to be a raving economic nationalist to understand that—in fact, it probably helps if you aren’t a raving economic nationalist, since the energy business is so thoroughly global in almost every respect except for the matter of where the holes in the ground are. And that’s one of the reasons API and others will be fighting the Trump administration on trade—very politely.

“I’m a passionate believer that what this industry does benefits humanity,” Eversole said. “America has a significant, once-in-a-generation energy opportunity and, through the right type of energy policy both in the regulatory space and through legislation in Congress, we can secure the American energy future.”

What does that “American energy future” look like? “It means our ability to protect friends and allies around the world, to help consumers in this country have choices about vehicles they drive and which appliances they use, and also to benefit from affordable, reliable American energy that is among the cleanest in the world,” Eversole continued. “This country is blessed with resources that make us the envy of other countries around the world. We as an industry have an obligation to our communities, our employees, and to society to do that in the right way. We are very optimistic that the Trump administration’s agenda for energy dominance understands the opportunity we have.”

Anything else?

“I’m watching Landman,” she said.

And you’ll notice a 30-second spot from API on every episode. 

If you’d told me 10 years ago that somebody was going to write a television drama that made life in and around Midland, Texas, seem really, really interesting, I’d have said that no such literary genius exists. I’ve spent a lot of time in Midland and grew up not far from there, and while there is a lot about the oil and gas industry that is genuinely fascinating, there’s a reason the writers of Landman had to introduce Mexican cartels and explosions and all other sorts of drama props to propel the story forward. Because oil and gas is ultimately about geologists and bankers and guys sitting at kitchen tables negotiating leases with people who inherited farms from their grandparents. It isn’t the Iliad. 

There isn’t any reason to doubt the industry’s conviction that the Trump administration is going to be a heck of a lot better for oil and gas than the Biden administration was or that this is, broadly speaking, good for the country at large. But the radical shift from one administration to the next highlights an important change in the oil industry and in American life: Oil and gas politics used to be regional—but, today, oil and gas politics is partisan.

A generation ago, the split was between producer states and non-producer states, with oil states such as Texas (and, once, California) pressing for industry-friendly policies and oil-consumer states wanting Chevron and Exxon to pay more in taxes and consumers to pay less for a gallon of gasoline. Today, oil and gas has been folded into the broader politics of Kulturkampf, and how you feel about oil and gas vs. wind and solar is part of the big question: “What kind of American are you?” Oil and gas has become coded right-wing, the same way Silicon Valley was—until about five minutes ago—coded progressive. That isn’t great for oil and gas. More importantly, it isn’t great for the country.

As noted, these are weird times.